Depending on your credit profile, you may be able to secure a $200 line of credit with as little as $49 down as a security deposit. You may also be considered for a higher credit line in as little as six months.
Many people may know Capital One as the Samuel L. Jackson credit card company (or the Jennifer Garner credit card company), but there's much more to the nearly 30-year-old bank.
Capital One planted its roots as a credit card company, specializing in lending to average American consumers, in 1994. Since then, it has grown the business to expand into all product lines we have grown to expect as consumers: banking, auto loans and investing.
What this all means for those looking to build their credit with a secured credit card could potentially benefit from building a relationship with one of America's most well-rounded financial companies.
The Capital One Platinum Secured Credit Card is a decent product for what it is meant to do - help those on their path towards building a stronger credit profile. Let's take a look at the pros and cons:
This card has two main pitfalls. First, the card has a relatively high APR. At over 25% APR, carrying debt on this card could be detrimental for anyone that is still trying to figure out responsible money management. Some cards, such as the OpenSky Secured Credit Card, offer significantly lower APRs. The second drawback is the lack of rewards. Products like the Petal 1 Visa offer those that are building credit at least some rewards.
On the positive side, Capital One will start reviewing new accounts for an increased credit line in as little as 6 months. The amount of credit available on a credit report can account for up to 30% of a credit score.
If you decide to open a secured account, Capital One will request a minimum security deposit of either $49, $99 or $200 depending on your credit score. This will provide you with a credit line of $200 to start. This deposit is refundable as long as your account is in good standing at the time of account closure.
Credit score is always top of mind when people apply for a new credit card, but it's not all the banks look at. A bank will also consider an applicant's ability to pay back debt, and any existing relationships with other banks. It's also important to remember that not all credit scores are created equally. The credit score used by popular monitoring sites like Credit Karma may not be used by the banks. There's no one magic score to get approved for a new card.
Capital One doesn't want consumers to blindly apply for credit cards, though. They recommend this product for those that are rebuilding their credit, which is defined as someone that has defaulted on more than one loan in the last five years.
Too many people overlook this essential feature offered by many banks. Those interested in this card can go through the preapproval process on Capital One's website. Preapproval is often the best way to see if you may be eligible for an offer. This is because the bank will conduct what is known as a soft inquiry. Soft inquiries allow a bank to review your personal information without impacting your credit score.
By submitting a prequalification request, your information will be reviewed to determine if you are a good match for a Capital One offer. If you're prequalified, you'll be able to review the offer or offers you may receive and submit an application at that time. If you decide to submit an application, a hard credit inquiry will be conducted. If you don't want to move forward with an offer, then no damage is done to your credit score via a hard credit pull.
Remember, being prequalified doesn't mean you'll be approved for an offer. It's an indicator that you're a good fit, but the issuer hasn't reviewed your full credit profile at this point. Once you apply, the issuer will conduct a full review and make a determination on your application.
The Reddit community is overwhelmingly positive for both this card and Capital One. The mobile app earns top marks in aggregate user comments. Many users also report a positive experience from Capital One's graduation program.
Unfortunately, the view is not as rosy when you head to the BBB. Many consumers have complaints about going to collection or having banking accounts frozen. A bulk of the negative reviews we sifted through relate to having negative account balances. It's important to remember that this is a credit building tool, and not a debt solution. Running debt up on this card and not paying your bill on time, will result in more negative marks on your credit profile.
The consumer reviews for Capital One as a whole are overwhelmingly positive. In fact, they just ranked the best bank for customer satisfaction. The product is missing some popular features, like rewards earning and low APRs. However, it offers a potentially low security deposit and the ability to receive a credit line increase in as little as 6 months.
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